All posts tagged Too Big To Fail

Do large banks have an advantage over small banks because of the perception they are “too big to fail”?

Answering that question is tougher than it sounds, as many government agencies, academics, and consultants have learned in their attempts to study the issue since Washington bailed out the banks to forestall economic calamity in 2008. Read More »

More than 50 Republican lawmakers sent a letter Friday to House Ways and Means Chairman Dave Camp (R., Mich.) saying they are “deeply concerned” about a proposed tax on banks they worry would undermine lending and curb economic growth.

The letter from Rep. Patrick McHenry (R., N.C.), a member of the House Financial Services Committee and co-signed by 53 House Republicans is the latest GOP pushback on Mr. Camp’s Feb. 26 proposal to overhaul the tax code. Included in the proposal is a quarterly tax on financial firms with assets greater than $500 billion. Read More »

A senior House Republican sought to raise the tax bills of the largest U.S. financial firms as part of a broad proposal to overhaul the tax code, lending momentum to an idea the industry has long opposed.

The proposal, which in the past has also enjoyed Democratic support, is unlikely to become law this year but its endorsement in a draft bill from House Ways and Means Committee Chairman Dave Camp (R., Mich.) gives the idea more weight as Congress lays the groundwork for future tax reform. Read More »

Two Republican senators proposed changes to the U.S. bankruptcy code to help unwind a large, failing financial institution, the latest salvo in an ongoing policy debate over how to avoid future taxpayer bailouts. Read More »

Five years after the peak of the financial crisis, Sen. Elizabeth Warren says Washington hasn’t solved the problem of banks that are “too big to fail.”

The Massachusetts Democrat, a thorn in the side of large Wall Street firms, marked the anniversary of the crisis with a speech Thursday criticizing regulators for missing deadlines on rules that could curb the size of large banks.

“If Dodd-Frank gives the regulators the tools to end too big to fail, that’s great, pick them up and use them,” Sen. Warren said, referring to the Dodd-Frank financial lawenacted in 2010. “But if regulators won’t end too big to fail, then Congress must act.” Read More »

The two lead senators targeting “too-big-to-fail” banks said Tuesday they don’t want to directly break up Wall Street behemoths in new legislation, but made clear they’d be fine with forcing changes at major banks if it means more stability.

Sens. Sherrod Brown (D., Ohio) and David Vitter (R., La.) said they weren’t convinced that regulators operating under the 2010 Dodd-Frank law can actually address the problems caused by systemically important banks, including a repeat of 2008 when hundreds of billions of taxpayer dollars were poured into Wall Street firms to stave off collapse. The two, who were speaking at a roundtable discussion, on Wednesday will introduce legislation that would sharply increase the capital cushions banks must hold against losses.

“There’s a growing bipartisan consensus that too-big-to-fail is alive and well, that it’s a problem, and more systemic reforms like looking at minimum capital standards is required,” Mr. Vitter said… Read More »

A key U.S. Senate voice in the debate over how to handle financial institutions deemed “too big to fail” is accusing a Wall Street lobbyist of stealing and leaking draft legislation targeting the nation’s biggest banks.

A spokesman for Sen. David Vitter (R., La.) made the allegation after a copy of a draft bill began circulating around Washington and Wall Street on Friday. The measure, clearly marked “draft,” is the product of work between Mr. Vitter and Sen. Sherrod Brown (D., Ohio) to address the size and complexity of the largest U.S. banks.

“A Wall Street lobbyist stole and distributed a copy of our draft bill to try and drum up support for protecting the big banks’ taxpayer funded handouts – and ultimately remain too-big-to-fail,” said Luke Bolar, a spokesman for Mr. Vitter. Mr. Bolar didn’t name the lobbyist or immediately return a request for additional details about the accusation… Read More »

The Senate unanimously passed a measure Friday night that lawmakers said would seek to eliminate the advantage large banks enjoy from being considered “too big to fail.”

The bipartisan amendment from Sens. David Vitter (R., La.) and Sherrod Brown (D., Ohio) directs the government to eliminate the advantages in federal subsidies and funding that banks larger than $500 billion in assets derive from the perception that the government won’t let them fail. The lawmakers said that the largest banks obtain cheaper funding and enjoy other advantages because they have grown so large and complex that the market expects the government would step in before their failure hurts the economy. Read More »

WASHINGTON – Politics can make for unexpected alliances. In the case of the country’s largest banks, that means embracing the 2010 Dodd-Frank overhaul law to try and quiet the ever-louder drumbeat in Washington over “too big to fail” banks.

Five of the top financial-services trade groups on Monday took on what they called “flawed arguments” about the subsidy the largest financial firms receive because of their size, interconnectedness, and the widely held belief that they’ll be in line for another round of government bailouts. In a joint release from a group that includes the Financial Services Forum and The Clearing House, Wall Street’s Washington representatives said the biggest banks are actually being penalized for their size in the wake of Dodd-Frank. Read More »

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